Journal of Economics, Business, and Accountancy Ventura Accreditation No.

110/DIKTI/Kep/2009

Volume 15, No. 2, August 2012, pages 187 204

IMPROVEMENT OF THE PROCESS OF NEW BUSINESS OF SHIP BUILDING INDUSTRY

Minto Basuki Djauhar Manfaat Setyo Nugroho AAB Dinariyana
Institut Teknologi Adhi Tama Surabaya (ITATS) Institut Teknologi Sepuluh Nopember (ITS) E-mail: mintobasuki@yahoo.co.id Arief Rachman Hakim Street 100, Surabaya 60117, East Java, Indonesia

ABSTRACT Shipbuilding industry is an industry group which has high risk. For that reason, the management should include risk assessment. The production process of new buildings in the shipbuilding industry is grouped into three major parts, namely the work of design, material procurement and production processes. Each stage of the production process will bring the risk and will accumulate on the overall risk. If the risk is not anticipated, the possibility of delays in the production process will be even greater. Risk assessment performed on each production process by using a probabilistic approach to the principle of multiplication in the theory of opportunity. Risk analysis performed on the construction of fast patrol boats was in the construction number 268, 269 and 270 on the PT. PAL Indonesia. From the analysis, it was obtained the greatest probability of occurrence of sequential delay which is in the process of the material, the production, and design group. The potential for loss is due to the risk of unanticipated costs due to factors affected by delays in production processes. Performance factors are still required for further study. Key words: Risk Assessment, Probabilistic, Risk, Shipbuilding Industry.

PERBAIKAN PROSES BISNIS INDUSTRI GALANGAN KAPAL BARU

ABSTRAK Industri galangan kapal adalah kelompok industri dengan risiko tinggi, sehingga dalam pengelolaannya harus mengikutkan risk assessment. Proses produksi bangunan baru pada industri galangan kapal dikelompokan dalam tiga bagian besar, yaitu pekerjaan desain, pengadaan material dan proses produksi. Masing-masing tahapan proses produksi akan memunculkan risiko dan akan terakumulasi terhadap risiko secara keseluruhan. Jika risiko ini tidak diantisipasi, peluang terjadinya keterlambatan proses produksi akan semakin besar. Risk assessment dilakukan pada masing-masing proses produksi dengan pendekatan probabilistik menggunakan asas perkalian pada teori peluang. Analisis risiko dilakukan pada proses pembangunan kapal patroli cepat pada nomor pembangunan 268, 269 dan 270 di PT. PAL Indonesia. Dari hasil analisis, diperoleh probabilitas terbesar terjadinya keterlambatan secara berturu-turut adalah pada proses kelompok material, kelompok produksi dan kelompok desain. Potensi terjadinya kerugian akibat risiko yang tidak diantisipasi dipengaruhi oleh faktor biaya akibat keterlambatan proses produksi. Faktor kinerja masih diperlukan studi lebih lanjut. Kata Kunci: Risk Assessment, Probabilistik, Risiko, Industri Kapal. 187

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INTRODUCTION As noted by Suryohadiprojo (2004), Indonesia shipbuilding industry, with the money velocity for the transportation by sea reaches up to 50.7 trillion rupiahs a year. As such, it is recommended that the shipbuilding should be dragged into a strong and modern industry. In another condition, Japan and Korea currently controls more than 80% world market share. In this case, yet, Indonesia shipbuilding industry absorbs only 0.5% share of the world shipbuilding market. That is why, it indicates the difficulties faced by Indonesia in terms of shipbuilding activities and supporting industries such as steel industry, machinery industry, and electrical industry, chemical industry decreased productivity, and many are bankrupt. For information dealing with the case above, it is good to see that the world shipbuilding industry has become an international concern as Chinas economic growth since 2003. For another example is Korea's shipbuilding industry which is also one that has triggered its development. This is one of which it can be seen from up to 236% order growth in the shipbuilding industry during the last five years, and after 2003 orders grew 5.2% per year. In 2006, 496 million CGT of new orders won by Korean 38.3%, China 29.6% and Japan 13.9% (Lee, Shin, and Park, 2007). According to China Knowledge (2009), shipbuilding companies in China have received orders for new ships of 4.1 million tones in July 2009. The number of orders is almost to reach by 70% of the total amount of shipbuilding orders worldwide. In addition, the Chinese shipbuilding companies have teamed up with the ship owners to increase market demand for shipping from China. For example of the Chinas case is in the first half of 2009. It gained the total value of exported ships stood at U.S. $ 9.13 billion, which equates to 70% of China's ship export value. However, the existence of excess capacity in the shipping world, causing the shipping industry in China is facing cancellation of orders, delays in delivery of

ships and other financial matters. To overcome the above barriers, China's shipbuilding industry has tried hard to focus on achieving high productivity and efficiency, reduces costs and energy consumption, and is currently able to transform the risk into opportunity. When considering the factors causing the above condition, it can be referred to Basuki and Widjaja (2008). They evidenced that there are several reasons why the shipbuilding industry should be develop. The reasons are such as the economic value of the shipbuilding industry, which globally has tremendous value; shipbuilding industry is the main industry of supporting industries. It is argued that the development of this industry will help develop other industries. This finally provides a multiplier-effect of the process of industrialization in a country. For example, in the construction of a ship, 50% 70% costs is the purchase of raw materials and equipment. Besides that, the shipbuilding industry is labor-intensive industries which are able to create substantial employment with high added value. With the development of this industry, it is expected that the independence of the defense sector with the manufacture of defense equipment in the country will be achieved. As described above, the shipbuilding industry is highly dependent on other industries from upstream to downstream. This dependence will determine the viability and the level of risk faced by the shipbuilding industry. To prove this fact, it can be seen as Figure 1. When dealing with shipping industries, it is stated that these industries are the businesses which have their own characteristics (the Ministry, 2010). The characteristics cover such as : the capital-intensive (capital intensive), labor-intensive (labor intensive), the payback is slow (slow-yielding), low value added (low value added), the value chain complex (complex value chain), low competitiveness (low competitiveness), high risk business (high risk business), a little ship orders (orders ship low demand), high-

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Figure 1 Synergies in Shipbuilding Industry

Public facility Sea Port

Road Bank

Air Port

Financial non Bank Financial Foundation Infrastructure Insurance

Economic Activity

Transportation

Ship Owner Shipyard Industry

Designer/ Maritime Consultant

Supporting Industry

Goverment

Regulation

Policy

Electric and electronic Industry

Piping, valve Industry

Plate and profile Industry

Electrode and Welding Industry

Economic Impact

Supplier

Machinery Industry

Miscellaneous Supporting Industry

tech (high technology contents), skilled (high skilled ship design and fabrication), high import content and low local content (high import contents and low local contents), lack of experience (low experience), the length of completion time (long term delivery ship). The shipbuilding industry is an industry fraught with risk. However, many of them are implementing a risk management to assess the risks involved in the production process. Again, it has still little risk analysis, as well as the limited research and risk analysis in the shipbuilding industry. For example, the shipbuilding industries in Indonesia are spread away by their geographical differences. And, these geographical dif-

ferences would also pose different risks. As such a condition, this study discusses the analysis of the risks involved in the production process for each of the shipbuilding, and the overall geographic clusters at the shipbuilding. Risk-based approach to production adopted in assessing the risk to the shipbuilding industry. Risk assessment is done on paper at the strategic and operational (management level) in the shipbuilding industry. Consecutive groups analyzed in the design, the materials and production groups. With the application of risk analysis, the shipbuilding industry to analyze the impact caused when the production process has been delayed. Some of the new building works have

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Table 1 Likelihood Criteria Likelihood Rare Unlikely Possible Likely Almost Certain Note of Likelihood < 1% from total work days 1%-5% from total work days 5%-25% from total work days 25%-60% from total work days > 60% from total work days Table 2 Definition of Consequence Criteria Consequences Insignificant Minor Moderate Major Catastrophic Note of Consequences Ineficiency Time < 10 days Ineficiency Time 10 s/d 20 days Ineficiency Time 20 s/d 50 days Ineficiency Time 50 s/d 100 days Ineficiency Time > 100 days

been done on PT boats. PAL (the company) Indonesia exposed most of the delayed delivery process, and even some new ship construction work has been stopped completely. This is because a problem in financing that is problem with the burdensome of contract item, materials, production processes, and management. Some of these problems have not actually led to the implementation of risk management in the process of building new ships, so the management of PT. PAL Indonesia can not anticipate the risks that exist. THEORETICAL FRAMEWORK The Standards Australia or New Zealand (in Basuki and Setyoko, 2009) described that the risk is any possibility of the unexpected event which can affect any activity or object. As such, the risk is measured by considering its consequences and its likelihood (possibility/ probability). In this case, Ben-Azher (2008) also described that a probability of risk occurrence is influenced by three factors such as Maturity factor (Pm) that is a factor that reflects the likelihood of risk for the development of new technologies; Complexity factor (Pc) which is a factor that reflects

the likelihood of risk for the development of the system; Dependency factor (Pd) which is a factor that reflects the likelihood of risk due to the dependence of the facilities, contractors and others. The consequences of risk occurrence are influenced by three factors such as Performance factor that is the factor that reflects the decline in performance and Cost factor that is the factor that reflects the incremental cost. Schedule factors: the factors that reflect schedule delays or schedule. Under the provisions of the Standards Australia or New Zealand (in Basuki and Setyoko, 2009), the probability criteria (Likelihood) and consequences (Consequences) are observed as presented in Table 1 and 2. So far, the concept of risk in the industry analyses has been conducted by several researchers under different conditions. The connection in the production design has been developed and recommended by the Design for Production of Storch (Storch et al., 1995) in establishing the correspondence between design and production to reduce the risk of errors that might occur. Analogically the concept which ahs been developed by

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Figure 2 Production Risk-Based Concept Risk Assessment

Cluster of Shipbuilding Industry

Production Process in Shipbuilding Industry

Hazard and Risk in Production Procees Stage

Acceptable Risk

Production Risk Based

Vassalos, Guarin and Konovessis (2006) was on the Design for Safety or the concept of Risk-Based Ship Design. This is the links between the assessment of safety and the design of a ship. As based on the above description, the risk-based design is a formal method which is systematically integrated in the risk assessment on the design process. This design is established for preventing from or reducing the risk of death, the assets, and the environment which are all the integral part of the design goals. The concept of Risk-Based Design is also used to minimize the failure rate and the cost of the field which has been done by manufacture, Todinov (2008). Risk assessment in Shipbuilding Industry There has been some risk assessments carried out on the shipping industries. Some of them are Asok and Aoyama (2005) to schedule risk using mathematical modeling approaches, Atua (2003) with the cost risk and schedule risk to the deterministic approach. With the statistical approach, the evaluation of risk has been raised by: Basuki

and Widjaja (2008), Basuki (2009), Gatti et al (2007), Lee, Shin and Park (2007), Lu and Tang (2000), Moyst and Das (2005). Basuki and Widjaja (2008) has suggested the need for risk mitigation processes in risk analysis with a qualitative approach and deterministic. Deterministic approach for risk analysis has also been conducted by several researchers, among others: Basuki and Setyoko (2009), Iskanius (2009), Kindinger and Darby (2009), and Novendi Basuki (2010), Li and Culinane (2003), and Geraldine Pujawan (2009), Robu, Gavrilescu, and Macoveanu (2003), Vassalos, Guarin and Konovessis (2006). Analysis of the optimization approach in the evaluation of risks has been carried out by Brown and Mierzwicki (2008), Lee, Park and Shin (2009), Yang et al. (2009). Basuki and Widjaja (2008) has conducted an evaluation of risk in the development process to approach by statistic analysis which was started early in the process of production to the stage of establishment. The evaluation of risk has been done from the

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Figure 3 Frame Work of Research

NEW BUILDING PROJECT

Design (Including Model Test)

Material

Productuon

Performance factor

Cost factor Probability of risk occurrence Design Probability of risk occurrence Material Probability of risk occurrence Production

Schedule factor

Total Probability of risk occurrence

Consequences of risk occurrence

Total Risk

design stage until delivery by Setyoko Basuki (2009) and Basuki and Novendi (2010) with standard analytical Australia. Asok and Aoyama (2005) evaluate the risks involved in the development process at this stage of assembly to the ship building schedule risk by using a mathematical model. Others can be used as evidence. For example, Lee, Shin and Park (2007) evaluate the risk in the shipbuilding industry from contract stage up to delivery by the statistical approach. Each carried out a risk in the assessment phase. Evaluation of the risk for the Bayesian network has also been done by Lee, Park and Shin (2009) in the shipbuilding process. Risk assessment at the design stage has been done by Brown and Mierzwicki (2008) with the inclusion of new technological approaches. Atua (2003) evaluates cost and schedule risk and the risk of ship building in the shipbuilding industry. Risk Assessment Model Using Probability For considering the risk assessment model, it is known that there have been models developed by several previous investigators, particularly in the fields of nuclear, aerospace, medicine and other humanities fields. In ad-

dition, risk assessment models are developed in which one of them is done by means of a probabilistic approach. For examples, Khericha and Mitman (2008), Satoh, Kumamoto and Kino (2008), Meshkat and Shapiro (2005), Wreathall and Nemeth (2004) using a combination of fault trees and event trees in probabilistic risk assessment analysis. Again, the fact is that there have been several studies developed by means of a probabilistic model. It was the Monte Carlo simulation method and this used the help of computer software, among others: Nejad, Zhu and Mosleh (2007), Abdullah et al. (2010), Kruizinga et al. (2008), Khericha and Mitman (2008), Satoh, Kumamoto and Kino (2008), Craney (2003), Yang (2003), Schleiher (2009). Deterministic and statistical methods in probabilistic risk assessment has also been done by previous researchers among others: Kruizinga et al. (2008), Bashiri (2010), Craney (2003), Yang et al. (2003), Schleiher et al. (2009), Meshkat and Shapiro (2005). RESEARCH METHOD The researchers propose the concept riskbased approach as one of the production

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Table 3 Risk of Agent

Number Risk of Agent Revised and modification design because equipment size. New Technology transfer problem. Revised design from Owner and Classification. Customs Clearence of material or equipment in Port. Delay of Purchase Order. Delay of Material in Shipbuilding Performance of worker in Production Procees. Delay of Production because delay of material. Revised of production Request from Owner and Classification. Instruction not responsibility. Performance of worker from Sub-Contractor Mistake of Design.

1 2 3 4 5 6 7 8 9 10 11 12

Table 4 Risk Event, Agent of Risk, Internal and External Risk

No. 1. Event Delay of Design Procees Risk Objective Agent Internal Revised and modification design because equipment size. New Technology transfer problem. External Revised design from Owner and Classification.

2.

Delay of Procurement

3.

Delay of production Procees

Customs Clearence of material or equipment in Port. Delay of Purchase Minimized Delay Delay of Order. of Schedule Schedule Project Performance of Project worker in Production Procees. Performance of worker from SubContractor

Delay of Material in Shipbuilding

Instruction not responsibility.

Delay of Production because delay of material. Revised of production Request from Owner and Classification. Mistake of Design.

process of risk assessment in ship-building approach to the concept of probability as shown drawn in Figure 2. Risk Model Development Risk terminology is developed at the level of

management because the operational risk analysis is conducted in which it includes such as the risk of productivity, technological risks, risks of innovation, risk systems and risk processes. Therefore, risk approach for each component of the production proc-

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Figure 4 Main Network Model

NEW BUILDING PROJECT

Design (Including Model Test)

Material

Productuon

Performance factor

Cost factor Probability of risk occurrence Design Probability of risk occurrence Material Probability of risk occurrence Production

Schedule factor

Total Probability of risk occurrence

Consequences of risk occurrence

Total Risk

ess can be used with the following formula. Risk = Probability of risk occurrence Consequences of risk occurrence (1) In reference to Ben-Azher (2008), probability of risk occurrence is influenced by three factors, namely: Maturity factor (Pm) that is a factor that reflects the likelihood of risk for the development of new technologies, Complexity factor (Pc) that is a factor that reflects the likelihood of risk for the development system, and the Dependency factor (Pd) that is a factor that reflects the likelihood of risk due to the dependence of the facilities, contractors and others. In addition, the consequences of risk occurrence are influenced by three factors, namely: Performance factor: the factor that reflects the decline in performance, cost factor: the factor that reflects the incremental cost of, and Schedule factors: the factor that reflects the delay in the schedule or schedules. Framework Framework for problem-solving research for this study is to use risk assessment procedures developed by the researchers (Figure 3) and frameworks such as those contained in Figure 3.

Hazard Analysis As presented in Figure 3, each production process brings a different hazard and has different risk levels. In this case, Basuki and Widjaja (2008) have developed a hazard model of the relation n to n in the statistical analysis of risk and hazard models which were developed with n to n +1 relation with the probabilistic approach. In this model, the hazard may pose some risks, and vice versa. Probabilistic Model This likelihood assessment analysis has actually been by several methods, such as: deterministic approach, the model simulation, the model of decision trees, a dynamic model approach, and an approach using the software. For example risk assessment models, particularly the assessment of likelihood can be done by means of a combination of decision trees, probability approach and the optimization approach. DATA ANALYSIS AND DISCUSSION Hazard Identification According to Basuki and Widjaja (2008), the identified hazard in the development process of new vessels include such as high-risk categories, including job erratum, moderate

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Figure 5 Design Network Model

Design (Including Model Test)

Basic and Performance

Key Plan

Yard Plan

Production Drawing

Test Procedure and Finish Plan

Revised and modification design because equipment size.

New Technology transfer problem. Revised design from Owner and Classification.

Probability of risk occurrence Basic & Performance

Probability of risk occurrence Key plan

Probability of risk occurrence Yard plan

Probability of risk occurrence Production drawing

Probability of risk occurrence TPTR

Total Probability of risk occurrence Design

risk category or medium enterprises, including labor skill, low-risk categories, including: one to enter order or report, delayed processing time, less labor, tools and environments have not been verified. Therefore, the process above is considered to have very low risk categories, including: employment information is incomplete, late material, production process is interrupted, an error making signs or products, verification tools have not been done, many reject the product, not ready to changes in the system, Subcontractors difficult to follow the process, the addition of materials or components, not progress as planned, faulty equipment, wrong understanding, the work environment has not been verified, the

document is incomplete and sometimes software errors. Again, Basuki and Setyoko (2009), defined that the identified hazard in the process of fast patrol boats in the construction number 268, 269 and 270 on the PT. PAL Indonesia. This description can be seen in Table 3 and Table 4. Network Model The network model is used to analyze the relationship among the factors used in the production process and the identified hazard. The network which is developed is divided into two parts, the main network models and network models of design, material, and production, as in Figure 4, Figure 5, Figure 6, and Figure 7.

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Figure 6 Material Network Model

Material

Hull Construction

Hull Outfitting

Machinery Outfitting

Electric Outfitting

Painting and Corrosion Control

Customs Clearence of material or equipment in Port.

Delay of Purchase Order.

Delay of Material in Shipyard

Probability of risk occurrence Hull construction

Probability of risk occurrence Hull outfitting

Probability of risk occurrence Machinery outfitting

Probability of risk occurrence Electic outfitting

Probability of risk occurrence Painting & Corrosion

Total Probability of risk occurrence Material

Assessment of VaR The assessment of value at risk (VaR) is based on the multiplication law of probability with the approach in the theorem opportunities. Each model is calculated for the probability values and the results are as presented in Table 5, Table 6, and Table 7 in Appendices. Concerning the probability values, it is shown at each production process. From this, then they are compared with the standard, and finally compiled as in Table 8 in Appendices. Through the first contract, ship building project should be completed in May 2009, with the addendum to be conducted as well. Later on, it should entail the revised settlement until December 28, 2009. The real ac-

complishment of the new ship was handed out on 1 April 2010. In this time span, there is a delay of 3 months, 3 days (93 days). For that reason, it can be determined as the value of Consequences in the Table 9 in Appendices. Again, with the contract, any delay of 1 day is to be fined a maximum of 5 per mill with the fine of 5% from the total contract value. In other words, the fine per day is USD. 435 million, - and the maximum one is Rp. 4.35 billion, - with a contract value of Rp. 87 billion, - per vessel. For the fact, it can be seen in Table 10 in Appendices. CONCLUSION, IMPLICATION, SUGGESTION AND LIMITATIONS All in all, it can be concluded as the fol-

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Figure 7 Production Network Model

Production

Work Preparation and General

Hull Construction

Piping System

Machinery System

Steel Work Outfitting

Painting and Corrosion Control

Interior and Furniture

Electric System

Electronic System

performance of worker in Production Procees.

Revised of production Request from Owner and Classification.

Delay of Production because delay of material. Performance of worker from Sub-Contractor

Mistake of Design.

Instruction not responsibility.

Probability of risk occurrence Work preparation & general

Probability of risk occurrence Hull Construction

Probability of risk occurrence Piping System

Probability of risk occurrence Machinery system

Probability of risk occurrence Steel Work Outfitting

Probability of risk occurrence Painting and Corrosion Control

Probability of risk occurrence Interior & Furniture

Probability of risk occurrence Electric system

Probability of risk occurrence Electronic system

Total Probability of risk occurrence Production

Table 5 Probability of the Delay of Design

Activity Basic and performance Hazard Revised and modification design because equipment size. Revised design from Owner and Classification. New Technology transfer problem. Sub Total Revised and modification design because equipment size. Revised design from Owner and Classification. New Technology transfer problem. Sub Total Revised and modification design because equipment size. Revised design from Owner and Classification. New Technology transfer problem. Sub Total Revised and modification design because equipment size. Revised design from Owner and Classification. New Technology transfer problem. Sub Total Revised and modification design because equipment size. Revised design from Owner and Classification. New Technology transfer problem. Sub Total Probability 0.033 0.033 0.033 0.100 0.040 0.040 0.040 0.120 0.043 0.043 0.043 0.129 0.043 0.043 0.043 0.129 0.027 0.027 0.027 0.091

Key plan

Yard plan

Production drawing

Test procedure & finished plan

lowing. First, the shipbuilding production process is divided into three activities, namely in the design process (design), procurement of materials and production processes. These three inter-related activities

influence the construction of ships in the settlement process. In addition, the probability of delay in the process of shipbuilding is also related to those activities. Second, now that the evidence has been

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Table 6 Probability Delay of Material

Activity Electric outfitting Hazard Customs Clearence of material or equipment in Port. Delay of Material in Shipbuilding Delay of Purchase Order. Sub Total Customs Clearence of material or equipment in Port. Delay of Material in Shipbuilding Delay of Purchase Order. Sub Total Customs Clearence of material or equipment in Port. Delay of Material in Shipbuilding Delay of Purchase Order. Sub Total Customs Clearence of material or equipment in Port. Delay of Material in Shipbuilding Delay of Purchase Order. Sub Total Customs Clearence of material or equipment in Port. Delay of Material in Shipbuilding Delay of Purchase Order. Sub Total Probability 0.243 0.243 0.243 0.729 0.276 0.276 0.276 0.828 0.243 0.243 0.243 0.729 0.234 0.234 0.234 0.702 0.239 0.239 0.239 0.717

Machinery outfitting

Hull outfitting

Painting and Corrosion control Hull construction

described in the findings, it can also be generalized that the greatest probability is concerned with the factors as the following: on the material, when the materials arrived late, late booking or order made late payments, then the possibility of late would be a great project. Another effect is a delay in the production process. The main effect is the loss of a chance to get profit from the penalty. Finally, PT. PAL Indonesia (the company) should also again and again conduct a study regarding the application of risk management for all construction projects of new ships. Any risk that occurs should be anticipated sooner. They should also begin such anticipation in the contract stage, the design, material purchase, production process until delivery stages of the ship to the buyer. Almost all new building projects undertaken by PT. PAL Indonesia have been delayed. Another implication of the delay of a project is a project loss that is due to fines, loss of profit opportunities as well as the implications of trust of outsiders (the ship owner, the financial institution).

It is advisable that they should anticipate all the matters by the management of PT. PAL Indonesia in conducting business in the construction of new vessels by applying the risk management policy. Furthermore, the process of risk analysis and risk assessment needs to be done by the management of PT. PAL Indonesia, including the risk mitigation process. It is also required that they start the process early, the stage of a new shipbuilding contract, PT. PAL Indonesia has to anticipate the risks that will occur. This is for reducing the delay factor in the new ship construction projects, both commissioned by the private sector, the state and a foreign party. Given to the present order of about 270 ships, almost everything has been delayed. Last but not least is that the performance factor is still not done in this study because the broad scope and difficulty in quantitative measurement. This must be a challenge for further research, both by researchers themselves and others.

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APPENDICES

Table 7 Probability of Delay of Production

Activity Hazard Work prepara- Performance of worker in Production Procees. tion & general Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction not responsibility. Mistake of Design. Sub Total Hull Construc- Performance of worker in Production Procees. tion Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction no responsibility. Mistake of Design. Sub Total Painting & cor- Performance of worker in Production Procees. rosion protec- Delay of Production because delay of material. tion Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction not responsibility. Mistake of Design. Sub Total Performance of worker in Production Procees. Piping system Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction not responsibility. Mistake of Design. Sub Total Machinery sys- Performance of worker in Production Procees. tem Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction not responsibility. Mistake of Design. Sub Total Steel work out- Performance of worker in Production Procees. fitting Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction not responsibility. Mistake of Design. Sub Total Probability 0.077 0.077 0.077 0.077 0.077 0.077 0.462 0.082 0.082 0.082 0.082 0.082 0.082 0.492 0.077 0.077 0.077 0.077 0.077 0.077 0.462 0.080 0.080 0.080 0.080 0.080 0.080 0.480 0.079 0.079 0.079 0.079 0.079 0.079 0.474 0.078 0.078 0.078 0.078 0.078 0.078 0.468

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Activity Hazard Interior & furni- Performance of worker in Production Procees. ture Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction no responsibility. Mistake of Design. Sub Total Performance of worker in Production Procees. Electric system Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction no responsibility. Mistake of Design. Sub Total Electronic sys- Performance of worker in Production Procees. tem Delay of Production because delay of material. Performance of worker from Sub-Contractor Revised of production Request from Owner and Classification. Instruction no responsibility. Mistake of Design. Sub Total

Probability 0.078 0.078 0.078 0.078 0.078 0.078 0.468 0.079 0.079 0.079 0.079 0.079 0.079 0.474 0.077 0.077 0.077 0.077 0.077 0.077 0.462

Table 8 Criteria of Likelihood

No. 1. Process Design Basic and performance Key plan Yard plan Production drawing Test procedure & finished plan Material Electric outfitting Machinery outfitting Hull outfitting Painting and Corrosion control Hull construction Production Work preparation and general Hull Construction Painting and corrosion protection Piping system Machinery system Steel work outfitting Interior & furniture Electric system Electronic system Probability 0.10 (10%) 0.12 (12%) 0.13 (13%) 0.13 (13%) 0.09 ( 9%) 0.73 (73%) 0.83 (83%) 0.73 (73%) 0.70 (70%) 0.72 (72%) 0.46 (46%) 0.49 (49%) 0.46 (46%) 0.48 (48%) 0.47 (47%) 0.47 (47%) 0.47 (47%) 0.47 (47%) 0.46 (46%) Criteria Likelihood Possible Possible Possible Possible Possible Almost Certain Almost Certain Almost Certain Almost Certain Almost Certain Likely Likely Likely Likely Likely Likely Likely Likely Likely

2.

3.

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Table 9 Criteria of Consequences

No. 1. Process Design Basic and performance Key plan Yard plan Production drawing Test procedure and finished plan Material Electric outfitting Machinery outfitting Hull outfitting Painting and Corrosion control Hull construction Production Work preparation and general Hull Construction Painting and corrosion protection Piping system Machinery system Steel work outfitting Interior and furniture Electric system Electronic system Consequences (days) 9.3 11.16 12.09 12.09 7.44 67.89 77.19 67.89 65.10 66.96 42.78 45.57 42.78 44.64 43.71 43.71 43.71 43.71 42.78 Criteria Consequences Insignificant Minor Minor Minor Insignificant Major Major Major Major Major Moderate Moderate Moderate Moderate Moderate Moderate Moderate Moderate Moderate

2.

3.

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Table 10 Penalty of Delay

No. 1. Process Design Basic and performance Key plan Yard plan Production drawing Test procedure and finished plan Material Electric outfitting Machinery outfitting Hull outfitting Painting & Corrosion control Hull construction Production Work preparation and general Hull Construction Painting and corrosion protection Piping system Machinery system Steel work outfitting Interior and furniture Electric system Electronic system Delay (days) 9.30 11.16 12.09 12.09 7.44 67.89 77.19 67.89 65.10 66.96 42.78 45.57 42.78 44.64 43.71 43.71 43.71 43.71 42.78 Total Penalty (IDR.) 4,045,500,000.00 4,854,600,000.00 5,259,150,000.00 5,259,150,000.00 3,236,400,000.00 29,532,150,000.00 33,577,650,000.00 29,532,150,000.00 28,318,500,000.00 29,127,600,000.00 18,609,300,000.00 19,822,950,000.00 18,609,300,000.00 19,418,400,000.00 19,013,850,000.00 19,013,850,000.00 19,013,850,000.00 19,013,850,000.00 18,609,300,000.00

2.

3.

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